On Rad's Radar? - smb Archivestag:blog.tmcnet.com,2011-06-13:/on-rads-radar//512017-06-20T18:29:06ZPeter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.POTS and PBX tag:blog.tmcnet.com,2017:/on-rads-radar//51.543062017-06-20T17:13:22Z2017-06-20T18:29:06Z Recently on LinkedIn and twitter, home for the haters, there has been noise about the death of PBX. Toshiba and Avaya certainly give credence to that thought. However, analyst research demonstrates that PBX seats still outpace Cloud seat sales....Peterhttp://rad-info.net/
Recently on LinkedIn and twitter, home for the haters, there has been noise about the death of PBX. Toshiba and Avaya certainly give credence to that thought. However, analyst research demonstrates that PBX seats still outpace Cloud seat sales. That gets muddied by MITEL's numbers for "cloud" seats (3 million) and Broadsoft's numbers for both "cloud" and "UC". A SIP trunk is not a seat or cloud in my book.

I know we are facing TDM sunset but from the looks of advertising from the likes of Birch and Bullseye, POTS is still alive and well - and profitable! POTS is still the reliable choice when it comes to voice lines for alarms, elevators and faxes.

For many scenarios, an on-premise PBX makes more sense than a haphazardly deployed Hosted VoIP scenario. Many a small business replaces POTS with SIP trunks to get mileage out of their aged key system. Switching to a new cloud PBX is not a viable option for some small offices because they don't want to change behavior. Hosted VoIP does a poor job on key system emulation despite years of partners selling it and providers trying to deliver it. It is one big face palm.

If PBX were indeed dead, wouldn't one of the leading UC companies have 1 million seats by now? Instead they are struggling to get to 700K seats.

The problem with UC is that it is mass market and it would be better off verticalized.

It would be better for all if Broadsoft wasn't competing directly with its own customers by selling direct to users at $15 per seat. That smells of desperation.

Someone asked me what I meant by that. Broadsoft selling direct cuts out their 400+ clients - like Vonage, TPX & Nextiva. Now these providers have to face price compression from their vendor. It's like ISPs and CLEcs who buy wholesale from ILECs and cablecos only to see retail rates are cheaper than their wholesale rates. Isn't that a crock?

BSFT can't add any more clients because every carrier on the planet has already picked a softswitch - BSFT, Meta, Netsapiens, or home brew. The only way to maintain revenue is to sell direct. BSFT isn't exactly raising the ocean or expanding the pie. They are just taking a big bite from the pie that their clients have been baking for 10+ years. Sure, everyone says that cloud comms is starting to take off; that it is hitting high adoption, but is it the UC we have seen or a bunch of variety?

In fact, all these choices without a clear winner probably helps Microsoft more than anyone. When in doubt buy from the established.

There are factors: it isn't a replacement system so much as a change. Extra gear is required (POE switches, QoS Router). It isn't as reliable as POTS - and can't be used in all places POTS was. The call quality is often not clear (unless you put it up against cell phones). (It's why they are touting SD-WAN for UC). It isn't cheaper than POTS in many cases. The deployments are often messy. (Providers can barely turn up Internet Access without issues let alone something complicated like Hosted PBX.)

And finally it doesn't pay much in commissions. At $15 per seat and even a 20 seat deal, the MRR is $300. That is a big headache for $300 in billing revenue. Easier, faster and better to sell network still. Or POTS. Or on-premise PBX with higher compensation. 3CX has been doing everything to make a partner's business model sing.

This isn't me being a Pessimist. This is me being a Realist. This is just how it is in the street in many places.

I don't hear anyone hawking white glove service or money back guarantee or no headache install. I hear the talk of zero touch deployment. That's the wrong way to go except for the CFO who wants to maximize profit per contract. Customer experience is someone else's domain.

I don't hear anyone talking about their call quality, their customer experience, their hand holding on deployment, their world class PMO. These are better things to talk about than price and features.

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Merger Synergies and CXtag:blog.tmcnet.com,2017:/on-rads-radar//51.542582017-05-24T14:13:07Z2017-05-24T17:54:16Z Sonus is merging with GENBAND. Last year Sonus bought Taqua for $20M. The talk is all about synergies and higher EBITDA. Oh and Accretive. No talk about how they will better serve their customers. CenturyLink is saying that after...Peterhttp://rad-info.net/Sonus is merging with GENBAND. Last year Sonus bought Taqua for $20M. The talk is all about synergies and higher EBITDA. Oh and Accretive. No talk about how they will better serve their customers.

CenturyLink is saying that after it scoops up Level3, they will be able to compete with cable in the SMB space. Really? You are going to offer up $300 pipes?

"Basically take some market share away from the cable companies, especially on the small and midsize customers where Qwest had lost quite a bit of market share when we bought Qwest." So you broke Qwest and its ability to sell to the SMB. What makes C-Link think you will find your mojo again?

I'm certain that during the 20+ months of integration, it will be challenging for a small business to procure bandwidth from you.

Charter/Spectrum makes it very hard to order from. It takes weeks to get a quote and contract. Then the order has to be scrubbed, checked and double-checked for 2-3 weeks. Another site survey as time ticks away and the client wonders when they will see the circuit. And despite this horrendous process of 7 departments having to touch the order (probably on paper in a file folder), it will look easy compared to a combined LEC of LevelLink or Century3 or whatever you call it.

It used to just be voice that was a bitch to deal with. LNP and toll-free RESPORs were a pain with added paperwork. Then with Hosted PBX, the extension to email mapping and other PBX planning (hunt groups, ACD, auto attendant) added to the complexity. Voice has many moving parts. Now network takes as long as voice!! Or longer. Even when there is NO construction necessary.

Makes me fear selling anything complex with most carriers.

The one thing that gets missed all the time: It isn't about EBITDA or synergies or fiber. It is about the CUSTOMER EXPERIENCE*!

End to end - from the time the prospect first encounters the provider until the long after the service is up and running, every touch of the prospect/customer adds to or takes away from the experience. Billing, support, admin, delays, lack of communications, handling expectations, CPE, and more are touch points where the CX could be improved.

It is interesting that a company would spend big dollars to redesign a website but not redesign its contract or quoting process or customer care service. Google Fiber was deliberate in how the sales offices would look and feel; the color of the boxes for CPE; and so much more. Their take rate and deployment were awful but the marketing details were very good.

With cratering revenues, I get why the merger mania is happening. But that doesn't solve the underlying problem that revenues are cratering and all products are a commodity. Until that is fixed, the rest of the actions - the new website, the mergers - are just distractions for stakeholders.

Our industry has new technology called SD-WAN that we have already over-hyped and turned into a commodity. It is hard to believe that it is all about cost savings already. Basically, you have explained to customers that broadband is just fine with a 4G card and an SD-WAN box in place of a Cisco or ADTRAN. So boom! there goes the Ethernet sales and MPLS can't be ripped out fast enough. Like Charlie Brown with a kite!

*CX or UX stands for Customer or User Experience

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If Starting Today as an Agenttag:blog.tmcnet.com,2017:/on-rads-radar//51.542452017-05-16T15:38:33Z2017-05-18T18:01:35Z If I was starting my telecom agency today, what would I do? When I started in 1999, I was selling basically one product (Wholesale DSL to ISPs). That was my entry drug of choice. It led to frame relay,...Peterhttp://rad-info.net/

If I was starting my telecom agency today, what would I do?

When I started in 1999, I was selling basically one product (Wholesale DSL to ISPs). That was my entry drug of choice. It led to frame relay, ATM, IP Transit, DS1/DS3 and PRIs. But it was a single offering to a very targeted market. Most of those clients from 1999-2001 are still with me!

Certainly an agent starting out is going to be offering bandwidth in all its colors. However, I would build a multi-vendor bundle to sell to a specific audience. I am a big fan of vertical sales. Anyone can be a Generalist, but being a Specialist pays better. How many GPs (general practitioners) are left in medicine or law?

And being a Specialist doesn't mean that you have to turn away other business that comes to you, it just means that you have Focus. You have a target to aim at. You have an audience that you can get to know and develop a message for.

It is far easier to market a specific bundle aimed at a target vertical than it is to create a marketing message aimed at the generic masses.

Targeted marketing is cheaper. Easier to send email or postcards to every ISP in the BellSouth region than to target every SMB in a state.

One bundle I have been working on is the Verizon Wireless One Talk service with 4G backup, a Cradlepoint router, FiOS and a Square POS (point of sale) system. It is a targeted package - Retail. It allows for add-on sales: smartphones, video surveillance, email or Office365 and web hosting. You could also offer credit card processing and PCI DSS Compliance via EarthLink. You could go bigger with managed wi-fi. There are many add-ons, but the original 4 component bundle is where to start.

The bundle contains the essential ingredients of a small retail shop: broadband, backup (because retail can't make money without 100% uptime on the Internet for credit card processing and digital phone service), wireless network, phone system and cash register. Signing up with SYNNEX and any of the Alliance Partners would get you all the access you need to bundle that - and make commissions.

Anyway that is how I would start today. Chasing Verticals with a multi-vendor solution that I designed for them.

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Tidbits (Part 2456)tag:blog.tmcnet.com,2017:/on-rads-radar//51.542372017-05-10T01:31:10Z2017-05-10T02:20:29Z BroadSoft Adds PaaS to Cloud Portfolio. Funny, I thought that BroadCloud was their version of PaaS. NoJitter blames this launch on the acquisition of VoIP Logic, a white-label customer that Broadsoft bought for $13M in 2016. As one BSFT...Peterhttp://rad-info.net/BroadSoft Adds PaaS to Cloud Portfolio. Funny, I thought that BroadCloud was their version of PaaS. NoJitter blames this launch on the acquisition of VoIP Logic, a white-label customer that Broadsoft bought for $13M in 2016. As one BSFT client stated it, "BSFT will force every customer to be on their cloud platform at some point." Yeah, it wasn't what they signed up for but BSFT has to feed the Wall Street beast.

RC did have some wins last quarter: RC "closed six deals with TCV north of $1 million dollars up from five in Q4. One of these wins was at Hyatt Hotels Corporation. Hyatt will be replacing legacy Avaya system at their headquarters with RingCentral Office."

Some factors that are shaking things up: Avaya bankruptcy; 8x8 and Shoretel hiring bankers for strategy; and Toshiba leaving the North American market.

RC states: "For each dollar invested in sales and marketing, we continue to see $9 of revenue and $7 of gross profit over the projected life of an Office customer. " A number of UC providers should take note of that stat.

CenturyLink sold its data centers to a coalition of PE firms that also bought a collection of cyber-security firms. The new company will go by the name Cyxtera Technologies and it will be run by the former CEO of Terremark.

Gary Testa left Polycom last March to become President of Star2Star. That lasted 11 months, then he quietly exited telecom. Michelle Accardi has his position now. I am guessing the IPO is on hold.

John Oliver took on the new FCC Chair (former VZ lawyer btw) and net neutrality again. Want to comment on the FCC proceeding ironically named Restoring Internet Freedom (Docket 17-108) head over to the domain www.gofccyourself.com

I tried to explain this to several security people. Thankfully now there is a study. "More than 70 percent of SMB IT managers say budget considerations have forced them to compromise on security features when purchasing endpoint security," according to a survey by VIPRE.

All these Rapid Expansion press releases are funny. Yeah, you are following the Long Channel Strategy of signing up everyone you can. No idea how that pans out for most since it is a million dollar cash deal. Each of those master agencies will need co-marketing dollars just like the multitude of vendors that signed up with the likes of Jenne, Tech Data and other VADs. At some point, the cost to get a sale may be too high.

VZW has a co-sale model for One Talk. AT&T has co-selling. But RingCentral is taking this further. There is the partner, a channel manager and a SME from RC involved in each sale - from 1 seat to a million according to the release. All three getting 100% of commission. That will get expensive quick.

I would like to stop seeing ridiculous numbers in the press releases: "over 2,200 sales partners are now offering our services" and "we have more than 4,000 partners" and "300 Master Agents signed up" and the best: "8 Master Agents, providing 200,000 sub-agents". STOP!

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3 Studies You Might Find Interestingtag:blog.tmcnet.com,2017:/on-rads-radar//51.541742017-04-03T20:23:14Z2017-04-05T23:28:15Z SpiceWorks study on IT buyers: "The survey results show nearly 90 percent of IT decision makers evaluate and recommend technology solutions while less than 50 percent of business decision makers do the same." In the SpiceWorks IT Buyer guide,...Peterhttp://rad-info.net/SpiceWorks study on IT buyers: "The survey results show nearly 90 percent of IT decision makers evaluate and recommend technology solutions while less than 50 percent of business decision makers do the same."

A CompTIA SMB study "identified the "sweet spot" of the SMB market to be companies with 10 to 99 employees. Those companies represent a 20% slice of the overall market. But it's a big slice in terms of sheer numbers: 1.8 million businesses fit the sweet spot description."

Another interesting point from CompTIA's study: "CompTIA breaks down the SMB market into three subcategories, the largest of which is "budget conscious" companies that represent 78% of the estimated nine million U.S. small businesses. Herbert said much of what that segment spends on IT boils down to break/fix services and other items such as web design."

"Healthcare IT professionals believe their data is safer in the cloud than on premises according to a survey released by Evolve IP." [source] They mean private cloud though. "Other key results of the survey showed that, on average, healthcare organizations have between two and three services (2.75 average) in the cloud." If you want to sell to healthcare, UCaaS, data backup and retrieval and hosted email (Exchange, Office365, whatever).

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Customer Segmentationtag:blog.tmcnet.com,2017:/on-rads-radar//51.540532017-01-24T19:15:15Z2017-01-24T20:41:39Z "Most businesses, whether B2B or B2C, don't cater to just one type of customer, even if they do only sell one product or service," writes Pamela Vaughan of HubSpot. The same messaging to VSB, small and medium business just...Peterhttp://rad-info.net/
"Most businesses, whether B2B or B2C, don't cater to just one type of customer, even if they do only sell one product or service," writes Pamela Vaughan of HubSpot.

The same messaging to VSB, small and medium business just won't work, especially for UCaaS. The pain points are different. The buyer persona are different. As I have said before: when you say you sell into the 1-500 or 1-1000 employee space, that is several segments of the market.

Seth Godin has an excellent short post about Almost No One buys from you. There are 27 million businesses in the US. If you have 10K business customers, that is 0.037% of the market -- or almost no one.

So when you say "I sell to everyone", you are fooling yourself. You have customers. Profile them. Duplicate them. Engage them.

"We think we're designing and selling to everyone, but that doesn't match reality. It makes no sense at all to dumb down your best work to appeal to the longtime bystander ..." [or the critic or the shopper than doesn't want any of your features or who wants to pay as little as possible]

It isn't about a scatter shot approach to sales and marketing. It is about being an archer or a sniper.

Fiber network operators and fixed wireless providers know this better than other service providers because you can't sell what the fiber or tower don't touch. However, it is a lesson that CLECs never wanted to learn.

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Two New VoIP Offeringstag:blog.tmcnet.com,2017:/on-rads-radar//51.540152017-01-05T14:54:06Z2017-01-05T16:17:01Z IDT is an international LD company doing about a billion bucks globally. Last year, it finally entered the Hosted VoIP world through its Net2Phone brand. Net2Phone launched in the channel. Net2Phone also launched an inbound service (like Google Voice...Peterhttp://rad-info.net/
IDT is an international LD company doing about a billion bucks globally. Last year, it finally entered the Hosted VoIP world through its Net2Phone brand. Net2Phone launched in the channel. Net2Phone also launched an inbound service (like Google Voice or Citrix's Grasshopper) called PicUp. Those terms are interesting.

TOS: "If you provide Feedback to Net2Phone, then you grant Net2Phone a worldwide, non-exclusive, perpetual, irrevocable, royalty free, fully paid up right to publicly display, broadcast, transmit and distribute the Feedback (and derivative works thereof), including but not limited to Your name and company name for attribution purposes. During the beta trial period, You will receive 1000 free inbound minutes per month calculated from the date of sign-up; provided that, if You do not use a minimum of 25 minutes per month, then Net2Phone reserves the right to close Your Account. Once Your free minutes have been used during a month, Services will be suspended until the next month begins. Net2Phone may terminate your beta trial service for any reason or no reason without prior notice. Once the beta trial period ends, Your free 1000 minute per month plan will automatically convert into the then-commercially available 100 minute free plan."

It looks like they are just lab testing. A 100 minute inbound plan seems like it would be for a very small business. That's less than 2 hours per month. Oh, well.

They did buy some functionality via the acquisition of LiveNinja. "Net2phone will combine LiveNinja's customer messaging and live chat service with PicuP, which gives small/mid-size businesses a self-service platform to deal with inbound calls, including auto-attendants, customized welcomes and voicemail to e-mail."

"LiveNinja offers a messaging application that facilitates companies and their customers having seamless conversations across multiple messaging and chat channels including live chat, SMS and Facebook Messenger," according to SeekingAlpha. Riddle me this: why would Google Voice service with 100 inbound free minutes need multi-platform chat integration? It seems that this should have been integrated into Net2Phone's Hosted VoIP offering instead of the stripped down PicUp service. It is a crowded space. Not sure they have product-market fit yet.

A similar service to PicUp launched from 3 VoIP veterans. David Walsh and Evin Hunt (from Shango); and Jason Tapolci (from VoIP Innovations) just soft launched their hosted VoIP service that is a mobile app only called Vocaly.

Launching an offering isn't cheap but it isn't that expensive either. There needs to be more experimentation in the space. A bunch of failures before we get some new, fresh ideas that work.

I give Verizon credit there because One Talk is an experiment with their Broadsoft platform that is powering other traditional offerings. We need IDT, Verizon and start-ups like Vocaly and Fone.do to experiment and see what happens.

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UCaaS Round-Up (Tidbits 2443)tag:blog.tmcnet.com,2016:/on-rads-radar//51.539372016-11-16T17:47:00Z2016-11-16T18:13:23Z Nextiva, a Broadsoft powered ITSP, announced at their user conference that it has released a new UC&C or Workplace Comms platform that they created internally named NextOS. Nextiva has 100K SMB customers. It is surprising that they didn't make...Peterhttp://rad-info.net/
Nextiva, a Broadsoft powered ITSP, announced at their user conference that it has released a new UC&C or Workplace Comms platform that they created internally named NextOS. Nextiva has 100K SMB customers. It is surprising that they didn't make an SD-WAN announcement, similar to Vonage Biz's SmartWAN or TelePacific's UC-X with SD-WAN options.

When asked if this wasn't just a wrapper around Broadsoft's UC-One or other packages, Nextiva replied, "NextOS was completely imagined and developed in-house."

"BroadSoft Business includes three core applications: UC-One, Team-One, CC-One, with BroadSoft Hub providing contextual intelligence across the entire platform so users can access the information and apps they need in one place," press release states. "Built into BroadSoft Business are bOpen, bMobile and bSecure capabilities that can enable service providers to deliver carrier-class security and reliability; the openness for businesses to be able to integrate their favorite business apps (CRM, email, calendars, Twitter, etc.); and full mobility to connect advanced unified communication and collaboration (UCC) capabilities to a user`s mobile devices." I'm not certain if this is BroadWorks add-ons or if you can only get this via BroadCloud. The difference being that BroadWorks is run by the VoIP Provider and BroadCloud is the white-label service that Broadsoft operates for the provider.

Frost & Sullivan analyst Elka Popova wrote, ""BroadSoft's share of the global hosted IP telephony and UCC services market is 41 percent, which confirms BroadSoft's market leadership." With 15 million cloud lines, "BroadSoft cloud PBX/UCaaS installed base 3x greater than closest competitor Cisco and 10x greater than RingCentral." The "cloud line" is defined by Popova as "The BroadSoft installed base is hosted IP telephony seats, fully-loaded UCaaS seats and business VoIP lines." Still don't know if they include SIP trunks in that number because 3 million of those would be WIND and XO trunks then. And that woould skew UCaaS/HPBX penetration. It does look impressive in a graph:

Microsoft previewed Teams, which is its answer to Slack. It is currently only available to subscribers of Office 365 Enterprise or Business plans.

Meanwhile Cisco introduced a "flex plan" for Spark that lets businesses choose cloud, on-premises or hybrid services in a single contract. That includes Spark Meetings, which is also a Slack competitor.

Slack is attracting its own ecosystem that allows companies to integrate other functions to Slack beyond comms. Slingr turns Slack into a task manager. Other scripts can turn Slack into a CRM with Slack's user interface. IDEA2 and other companies like the user interface and the open API on which they can add functionality to an app people already like and use on desks and on phones.

Interesting that these folks are rolling out more complex platforms at a time when Verizon is rolling out One Talk which simplifies the whole UCaaS thing for small business. It's my experience that most businesses don't want complicated (hence, Slack!) and most users want simple (think Facetime). Without user adoption, this is wasted expense.

Want another example? Salesforce CRM at $99 per user per month but only a couple of people on the sales team use it actively. There will be managers who don't utilize the dashboard or coach to the activity in the system. Despite how integrated the SF ecosystem can be, it isn't worthwhile unless the users -- your employees -- are using it and benefiting from it! Same goes for any software, especially UCaaS (which is morphing again from Hosted PBX to UCaaS to UC&C and WC&C).

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UC Tidbits #2441tag:blog.tmcnet.com,2016:/on-rads-radar//51.537172016-07-05T21:09:29Z2016-07-06T20:33:28Z So many pieces of news about the UCaaS and UC&C segment that I just wanted to cover the highlights (with links) for your perusal. New ReportsWeb Global UC&C study: "The global market is gradually experiencing the transition from legacy...Peterhttp://rad-info.net/
So many pieces of news about the UCaaS and UC&C segment that I just wanted to cover the highlights (with links) for your perusal.

"The global market is gradually experiencing the transition from legacy telephony services and messaging platforms to new UC&C services and platforms. We expect more number of global deployments of UC&C in coming years, driven by growing popularity of applications, such as rich collaboration, mobility, video conferencing, and telepresence." Key word is gradually.

"Business process integration and social media communications have become the primary focus of enterprises. Companies seek low-cost solutions, such as BYOD and web real-time communications (WebRTC) to deploy UC&C solutions." BPI or BPaaS - it isn't stand alone products. It will be an integrated platform to run business process that happen to include comms. (At least at the enterprise level)

And of course the growth guess: "Global unified communication and collaboration market expected to grow at a CAGR of 12.3% from 2016-2020," says a report by Technavio.

The news seems to miss that the different sectors of the marketplace are migrating from legacy for different reasons - like cheap dial-tone replacement, simul ring, etc.

The market is buzzing with Skype Integration news from RingCentral, MegaPath, BitTitan, even Yealink and others.

Master agencies are seeing a way to grab the attention of Cisco partners. First, AVANT teamed with Cisco to accelerate sales for Cisco Powered Providers.

Next, MicroCorp amped up its "relationship with IntelePeer, in order that certified Cisco partners can earn monthly recurring commissions on voice services for those selling the Spark and Meraki MC platforms." Cisco wants partners to get used to selling cloud and voice, because Spark, ya know.

As if there weren't a large number of service providers in the space of UC&C - from Fuze, RC, the Cloud Comm Alliance members to the LECs to the other numerous ITSPs. Now softswitch vendors have decided to become service providers, too. Broadsoft BroadCloud; GenBand Nuvia; Alianza Cloud Voice Platform; and Metaswitch MetaSphere Cloud Services are all competing with their customers and making it easier for new entrants into the already bloody ocean of Hosted VoIP. (Now even enterprises can be an ITSP).

Not to be left now. Cisco and Microsoft have jumped into the fray to compete for UC&C customers with Spark, HCS, Office365+Skype4B. The PBX vendors like NEC, Unify, Avaya and Mitel are in the mix and feeling the pinch to have a cloud component. Not only a cloud component but contact center too. Oh, how complex we must make it.

Everyone is pushing up-market, but Cisco recently did a study on small businesses. The study found "on the IT front, a majority of small companies (86 percent) are considering the use of cloud-based unified communications (UC) systems as a possible solution to their communications needs, replacing their more traditional premises-based counterparts."

Yealink has phones for Skype4B. One of the reasons that you see Jabra, Plantronics and Sennheiser at VoIP shows is because bluetooth headsets are becoming common in the call center space and more UC&C users are choosing to dispatch the deskphone.

"Yet unified communications as a packaged service, despite its relative maturity, remains far less than universally adopted, particularly outside of larger enterprise accounts. A recent survey of more than 400 enterprise and SMB IT decision-makers, performed by UBM Tech for XO Communications, found that only one-third of organizations had fully embraced UC. On the other side of the spectrum, a separate survey performed by Osterman Research for ConnectSolutions found that about as many IT decision-makers (26 percent) and business deci-sion makers (39 percent) are either "somewhat" or "very fearful" of migrating to UC. Nearly half of those surveyed admitted that they don't fully understand the full impact UC would have on their organizations. These fears and trepidations come despite the fact that 71 percent of those surveyed by Osterman believe there are "significant" or even "enormous" benefits that can be realized from the deployment of UC." This is a part of
a nice piece that Martin Vilaboy at Channel Vision magazine wrote on UCaaS demand and adoption.

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A Big Shift Coming to Telecomtag:blog.tmcnet.com,2016:/on-rads-radar//51.537162016-07-05T20:02:49Z2016-07-14T19:27:39Z Our sector of the marketplace - telecommunications - is about to undergo a change. Yeah, we have been in a shift for a good while, but more is coming. We went from TDM to VoIP to Hosted PBX to...Peterhttp://rad-info.net/
Our sector of the marketplace - telecommunications - is about to undergo a change. Yeah, we have been in a shift for a good while, but more is coming.

We went from TDM to VoIP to Hosted PBX to UCaaS to UC&C.

We went from T1 to cable broadband to Gigabit.

The consolidation of cable will tighten the market in 15 to 18 months. (It takes that long for integrations to take hold.) Now if the integrations are not a big fail, then cable - New Charter/Spectrum, Comcast, Altice - will ratchet up the competition in the small business market for triple play.

"Cable/MSOs are the fastest growing providers in the business services market, with much of their recent success in the mid-size business space," reported MarketResearch. Think about that: the mid-sized space - not just the small business segment of the market.

Of the $104 Billion total businesses spent on telecom services in the US in 2014, AT&T had the largest share (33%), followed by Verizon (22%) and the rest of the LEC band of brothers (Level3, CenturyLink, Sprint, Windstream). MSOs have more than $12 Billion of that pie, with the lion share - $5B - going to Comcast coffers alone.

SIP anyone? 54% of business cable subscribers also use cable for voice, the report states. That means less than half the businesses using cable are buying voice from another provider. That is a shrinking opportunity for the 2000 Hosted VoIP players in the US.

"Last year the Cable/MSO share of businesses with 100+ employees rose to 17%, reports TNS. "The main driver behind this growth was a heavier reliance on internet service and the need for greater bandwidth; two areas where larger cable providers excel."

Telco broadband has not kept pace with cable in speed and price. Egged on by Google Fiber - and a declining market share of businesses - ILECs have started tentatively rolling out faster fiber based broadband - 100MB to 1Gigabit depending on the ILEC (Windstream versus CenturyLink or AT&T).

UPDATE: Google just rolled out Gigabit Fiber to small business starting in Charlotte in July of 2016.

The ILECs have made a tremendous CAPEX investment in TV - just as OTT TV is hitting its stride. They spent big to supply triple-play, when they could have spent the money on FTTx projects for faster bandwidth. That was just uncreative thinking. [More of that Me-too mentality ingrained in telco.]

All of this will stress ILECs, some CLECs and even some OTT VoIP players. When cable takes about 35% of the SMB market, there won't be much room left for anyone else.

In March of 2016, "During the fourth quarter, Verizon reported that total broadband connections dropped to 2.1 million as it lost more DSL subscribers after losing 94,000 DSL customers," according to Fierce media.

Verizon is transitioning. Verizon is now betting on mobile ads (AOL acquisition and Yahoo bid); 5G fixed wireless broadband replacement for wireline services; and IoT (including connected cars) to add to its coffers.

A point I make often is that the debt that the ILECs carry is crippling with flat revenues.

Think about this: Vonage has taken $800M worth of voice revenue. Twilio gets $240 million in voice revenue. This is revenue that typically would go to Level3, Verizon and AT&T (and it probably does terminate to them eventually for a smaller percentage of that money).

WebRTC is being used in so many apps to allow for video and voice calls - bypassing the traditional voice network. [And bypassing the cellco text system and dollars.]

Then, we have Cable beating Telco in broadband bandwidth. Always has in fact. Gigabit fiber will be the real winner if the telcos decide to pursue that route for real (versus in just press releases).

We have telco getting in the data center - and now we have telcos looking to get out of that business without embarrassment.

There is a Talent problem, too. There are too many musical chairs. Not only can't you set a strategy when you shift personnel that much, you can't execute on a strategy either if the cogs are constantly being replaced. (And I don't mean cogs in a bad way. It takes a lot of talent to keep the wheels spinning.) The talent drain has also resulted in a domain knowledge drain as well. Quite frankly that means they don't where things are and how things have been done to keep things working. It isn't all documented, especially fiber maps!

Let's face it, for many companies that started with an A Team, they are now running with a B or C team. Why? As Steve Jobs said, "A Players hire A Players, B players hire C players. Get it?"

People move from company to company in teams. The same routine and team may work once, but it is not often a repeatable experience. There's a reason the Cavaliers recruited LeBron back to Cleveland - and didn't hire the whole Miami Heat starting line up.

There is also a surprising lack of talent for the new services and skills needed for omni-channel marketing; omni-channel customer service; cloud, managed services, migration and integration. This lack of skill will choke growth and brands.

We see outages and hacks every day. The worry is only about getting a customer. There is little concern for retaining that customer; data security; or a resilient network (4 Nines is good enough).

Many people are choosing smaller organizations to work for. The reasons are numerous but I would think that impact and voice play a major part. In smaller businesses, any one person can have a voice and can see the impact that they are having on customers, culture, and the company. That isn't the case in larger organizations.

Most financial experts are predicting an economic slump in 2017. It won't matter which candidate wins the Presidential election, a slump is coming. We have under-employment; increasing number of freelancers; and a stagnant wage. None of these components inspire an economic engine that is fueled by consumer spending.

ARPU for cellular, cable and VoIP segments have been fairly constant over the last 4 years worth of data I could find. Bandwidth and voice revenues are actually shrinking. Total telecom spending from 2013 to 2014 shrunk $6 Billion dollars according to MarketResearch.

Growth will be hard to find. We are seeing a price war in cellular accompanied by escalating customer acquisition costs.

Hosted VoIP is experiencing a similar battle for customers that is increasing the cost of customer acquisition. Rising SPIFFs and other compensation are being used to grab both market share and channel partner attention.

PBX vendors are NOT crashing and burning as many had predicted. Premise PBXs are still being sold and installed by a robust band of vendors - Mitel, Shortel, Avaya, 3CX, Fonality, Zultys, Panasonic, NEC, Siemens and more.

We are half way through 2016. No big winners. The Twilio IPO was a surprise. Vonage spending all of its acquisition money for the year on Nexmo, Twilio's competitor, seemed strange, since there were Broadsoft clients they could have picked off instead to take a big step forward in the race. Slack and all the Skype4B hype are little surprises.

2016 is half over - and so many companies have either done M&A or played musical chairs that I expect nothing magical to happen in the rest of 2016. And I look at all of this and wonder what 2017 holds.

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GoDaddy Buys Some Voicetag:blog.tmcnet.com,2016:/on-rads-radar//51.536162016-05-18T13:37:50Z2016-05-18T14:16:00Z In a surprise move, GoDaddy is acquiring FreedomVoice of Greater San Diego, a former client and employer, for $42M plus $5M more for milestones. The CEO and his wife have been building it to sell since 2012. GoDaddy is...Peterhttp://rad-info.net/
In a surprise move, GoDaddy is acquiring FreedomVoice of Greater San Diego, a former client and employer, for $42M plus $5M more for milestones. The CEO and his wife have been building it to sell since 2012. GoDaddy is getting a cloud phone product much like Grasshopper or Google Voice to upsell to its small business customers.

The cloud phone service is a good fit for selling domains, hosting and email to VSB (very small business with 1-5 employees).

This line in the press release cracks me up: "GoDaddy has 14 million customers and many of them have struggled to find affordable and simple telephony solutions," said Steven Aldrich, Chief Product Officer, GoDaddy. Really? There are approximately 2000 Hosted VoIP providers in the US. You can't get away from the adds from 8x8, RC, Vonage, MegaPath and others, so if GoDaddy's customers are struggling, well, that says something about the perception GoDaddy has of their customers.

GoDaddy hired a General Manager and Senior Vice President, Telephony. They must see it as a strategic product line. Or they figure since Intermedia.net bought 2 VoIP companies - Telanetix and AccessLine - that they should too.

One channel company thought this would position GoDaddy against Microsoft. Clearly, that editor has no idea. GoDaddy, other domian merchants and Vistaprint use upsell techniques to raise ARPU. Have you tried to buy a simple $10 business card product? Or a single domain? How many screens did you have to go through? Now one screen will offer a vanity toll-free number. Another will offer a cloud phone service. That isn't a position against Skype.

Also, GoDaddy acquired Apptix cloud business last year for $22.5M. "GoDaddy is one of Microsoft's largest Office 365 resellers".

Tucows, another domain merchant, launched Ting, an MVNO, in 2012. Ting is now in the fiber to the premise business as well in VA and NC.

Domains are a commodity business. GoDaddy went public in 2015, which means money is easy to get to buy some revenue. So here you go. They don't get a SIP Trunking business with FV, which means they won't be enabling Skype for a while. The Hosted Phone system platform was being re-worked when I last saw it in early 2013.

The PR says, "FreedomVoice products will continue to be available online and through partners. GoDaddy and FreedomVoice plan to deliver new cloud-based voice products in the near future." With changes like this, partners usually get wary. Acquisitions mean layoffs -- there is no other way to squeeze that $42M out of this VoIP business.

In other news, a company that just crossed my radar screen - Better Voice - was acquired by Inteliquent. Inteliquent used to be called Neutral Tandem, before they bought Tinet's network assets, re-branded, then later sold those very assets to GTT to re-focus on tandem switching. Now it is buying a cloud communications platform with an API to add to its Omni portfolio.

More M&A to come. Too many players and not enough market share for Hosted VoIP - probably because of the way it is sold, implemented and deployed.

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What Channel Are You Watching?tag:blog.tmcnet.com,2016:/on-rads-radar//51.535782016-04-25T21:10:44Z2016-04-26T19:07:28Z One thing I have noticed: UCaaS sales overall are not accelerating. Gary Kim writes how it is becoming a commodity. The VoIP services market is up 5% to $73Bn in 2015, says IHS. Residential makes up 62% of that....Peterhttp://rad-info.net/
One thing I have noticed: UCaaS sales overall are not accelerating. Gary Kim writes how it is becoming a commodity.

Vonage Business grew because of acquisitions. It is yet to be seen how the 4 acquisitions, 3 platforms and large target market work together. From selling to very small business (VSB) with a sub-$200 ARPU to acquiring a company with $4400 ARPU is a wide range. Three of the acquisitions were all about Hosted PBX, but iCore, founded in 2004, was offering their 85K seats Microsoft SfB, IAAS and Broadsoft.

The sales avenues are different too. Telesphere and Simple Signal drove sales primarily through the indirect Channel. That is different than Vocalocity and Vonage, which were focused on inside sales and online sales to generate business. iCore was all direct sales. A lot of different engines. Channel Conflict abounds.

Most startup success, according to Bill Gross, is about Timing. Broadsoft had a long run- 12 years or so - of having to compete against just premise PBX and open source Hosted PBX offerings. Broadsoft and its client providers had ten-plus years to ramp up the market and create demand.

Unfortunately that wasnot enough time to make the market move to where they needed it to go. Selling Change is very hard. Most people buy replacement products. Telecom is a toothache that they don't want to deal with. They stick to what they know.

Salespeople - indirect and direct sales channels - have spent years selling replacement services in a transactional manner. Getting those channels to shift to selling change (cloud) has been slow and is still in-process.

There isn't enough Demand yet. There isn't a Brand driving the market.

Seth Godin writes about Awareness, trust and action. While the awareness for UCaaS may be increasing, the action piece hasn't. Probably because of the Trust piece. And actual awareness of UC, HPBX, UCaaS, CCaaS, ECaaS and other meaningless terms bantered about by the providers probably causes more confusion than awareness. Confusion does not foster Trust. See the dilemma?

Hardware PBX is still selling. Now it sits in a data center instead of on-premise (within easy reach), but still selling. Ask any of these companies if boxes are still moving:

People are staying safe. The Trust Thing Again.

Microsoft and Cisco have what I call Demand. People want to buy it. They distribute through VADs quite frankly because they don't want to deal with distribution to what amounted to 125K resellers in years past. Far easier to let a VAD like Ingram handle it.

Today, we see ITSPs knocking on the door of VADs hoping that it will increase sales. I don't see how that model works, since the ITSP has yet to create DEMAND or Awareness for its BRAND.

A VAD is an online catalog of SKUs. It is not something that you can browse. You have to know what you are looking for. Even searching for a category like a UPS or a switch needs to be narrowed down to size or brand or model. So searching for something that doesn't even lend itself to SKU would be irksome. (Irksome doesn't work. Frictionless works.)

While it, a VoIP SKU, is a billable entity, it has to be consumable like a software license or a piece of hardware. And the reseller has to understand the SKU and how it fits into the solution (what other SKUs are needed to build the solution.) It is more complex than I can describe until you have searched for a SPLA from Microsoft for your specific use case. Now imagine scrolling through that to order a UCaaS solution for a company of 20 employees plus porting numbers and toll-free. Yeah.

[Another visual on this concept, remember how many USOC codes were needed to create a PRI? It was the channel, the PRI card, the loop, and the DID. VoIP is similar. So what SKUs will you need for a seat, a voicemail, an efax, etc.?]

That doesn't even consider how a reseller would know to order your stuff through Ingram - and why he would do that as opposed to going to a master agency or going direct.

Demand and Brand are just 2 key components. Timing, which is required for startups, is starting to slip away. Microsoft and Cisco and other entrenched vendors are tying up the Enterprise space. Lots of room to sell to under 100 seats - a majority of the market - but no one wants the hassle. Cost of sale is high. Cost of support is high. Churn is high. No upside, except that market size they keep quoting in investor prezos consists of mainly the sub 100 seat company. It should be interesting.

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VoIP Tidbits (Part 2430)tag:blog.tmcnet.com,2016:/on-rads-radar//51.534442016-02-29T17:07:22Z2016-02-29T17:31:09Z ANPI announced that it was launching a residential package. That will be hard to do on a Broadsoft platform, because the licensing is deemed too expensive. One telecom exec mentioned that ANPI was following the Vonage model. I disagree....Peterhttp://rad-info.net/
ANPI announced that it was launching a residential package. That will be hard to do on a Broadsoft platform, because the licensing is deemed too expensive. One telecom exec mentioned that ANPI was following the Vonage model. I disagree. I think that many of the 100 partners that ANPI signed up to resell its white-label service have more resi customer than business.

ANPI's model is more like Momentum (pre-acquisition of Alteva) but in reverse, because Momentum was delivering white-label VoIP to tier 2 and tier 3 cable companies. With the TDM transition, there has to be RLECs and cablecos who are unprepared to deliver VoIP - or at least ANPI is hoping so.

Fonality put out a press release that says it is valued at $45M. The exact wording I received from the 11-year old company was as follows: "The $45 million business phone system provider continues to see its growth accelerating into 2016 and beyond." If you take it as a valuation, that means that there is a for sale sign on Fonality. Possible buyers in my eyes: 8x8, Voxox and Digium. 8x8 would want them because both target Allstate insurance agencies and Fonality is "Surpassing 2,000 customers in the insurance sector, the company's largest vertical."

Other things from Fonality: "Fonality just announced the latest updates to its Heads Up Display (HUD), which include greater functionality for the company's existing Video Collaboration offering. ...The new features include instant screen share and the ability to schedule and manage recordings,among others, but the best part about Fonality's Video Collaboration is its seamless integration within HUD Web." The company also stated that in 2015 it sold 22,000 new seats.

Last month, a jury awarded GENBAND an $8M judgement against Metaswitch for infringing on 8 patents. This is far from over as Metaswitch is suing GENBAND on patent infringement as well. GENBAND is sitting on the old Nortel patents. Someone explained to me last week that this all started over merger talks that went sideways. Does Metaswitch have $8M in cash to pay a judgement?

There are so many patents out there for VoIP, everyone is likely infringing!

Winstream's Blunder Customers, Agents Are Paying Fortag:blog.tmcnet.com,2016:/on-rads-radar//51.534392016-02-23T03:58:41Z2016-02-23T14:04:32Z In the news, Windstream on its trek up-market is plowing through a field of customers and partners. "In December, Windstream sent letters to 171 small-to-midsized business (SMB) customers and their partners explaining that negative or low-margin accounts would be...Peterhttp://rad-info.net/In the news, Windstream on its trek up-market is plowing through a field of customers and partners.

"In December, Windstream sent letters to 171 small-to-midsized business (SMB) customers and their partners explaining that negative or low-margin accounts would be subject to significant rate increases, or these customers were also given the option to move to another carrier without penalty. As part of an ongoing effort, more letters will be delivered to partners and customers in March."

Is it the customers' fault that WIND signed a contract to deliver services they couldn't afford to?

Windstream quoted an MPLS network for me a few years ago. The underlying carrier was TWT, but WIND came in at a good chunk lower. I asked how that was possible. The channel manager's reply was they WIND had great wholesale contract rates.

I just didn't see how they could provide that service at that rate AND pay me my commission AND provide any kind of service. I explained it to the customer and they agreed with me.

How awful it must be to sell something then have the customer be told mid-contract that rates are increasing. Deltacom/EarthLink has done that a couple of times to one client of mine. It never goes over well. It seems like fraud. The client can't walk away if he gets a better offer. Why does the carrier get to raise contracted rates? Seems lawyers will be involved.

According to the article, the SMB segment (under $1500 in monthly billing) is Windstream's Windows XP. About 2% of the accounts were underwater! As Windstream's CEO said, Cable owns the SMB space. CLECs can't compete on reselling network alone. Apparently if you don't understand margin, math and what good revenue is, you probably shouldn't be running a CLEC.

Will partners stick with WIND as they go upstream? I don't know. I am not even sure how they compete up-market. AT&T, Verizon, Level3, CenturyLink, TelePacific and even cable compete in the "Enterprise" space. Comcast just dropped $500M for an enterprise division. It will AGAIN be a price war for WIND - and a couple of years from now, these new customers will be getting a letter.

The only place that WIND can compete would be in-region as an ILEC or any location that they have fiber to the building (preferably fiber that they own). It would seem that Type II circuits for them will again become a problem.

What kind of bundling will they be offering the Enterprise?

There are are only 600K businesses with more than 20 employees in the US. There are over 5 million firms with less than 20 employees! [source]

Windstream sold off its data center business for cash. They abandoned the Hosted UC platform they were using in lieu of going with Avaya and MITEL for UC. Those names are familiar to the enterprise space - and maybe to the channel partners who stay with WIND, although I would think they have their own contracts with those manufacturers.

Lesson to be learned here for partners, customers and the industry.

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Momentum Trolls Windstream (Going Up-Market)tag:blog.tmcnet.com,2016:/on-rads-radar//51.534012016-02-02T18:45:33Z2016-02-02T19:20:58Z I received this email yesterday from Momentum with the letter attached (with far too much private info not blacked out.) "As many of you already know, Windstream is eradicating their SMB Business (Customers billing under $1500) and sending them...Peterhttp://rad-info.net/
I received this email yesterday from Momentum with the letter attached (with far too much private info not blacked out.)

"As many of you already know, Windstream is eradicating their SMB Business (Customers billing under $1500) and sending them letters like the one I have attached. Go get your customers and find them a happy home (preferably Momentum) before someone else does. Let me know how I can assist."

There are 27.5 million small businesses in the US according to 2012 data from the SBA and over 22 million are self employed with no additional payroll or employees (these are called non-employers). The SBA defines a small business as an enterprise having fewer than 500 employees. There are only 18,500 firms with 500 employees or more in the US. [infographic]

So the 22 million will be using cell phones or services like Grasshopper, RC, FreedomVoice or other Google Voice type auto-attendant in the cloud service. That leaves 5.5 million that can be targeted in the SMB category. [By the way, IDC says that there are 8 million business with under 100 employees to target.]

SBA data shows almost 1 million businesses with between 5-9 employees. However, a 5 employee business at $30 per seat is $150 per month. You need a lot of them to scale and move the revenue needle.

Or you need to be like an MSP, roll a bunch of services together to increase ARPU to $1000 per org. 8x8 ARPU is $369 now (up from $309 a year ago) as they went up-market, but those numbers get skewed with 2 large deals (one being 2400 seats). It only takes one 100 seat sale to match 20 smaller deals, right?

Something to ponder: Can you afford the cost of selling to them and supporting them?

There are more than 75,000 business with 50-74 employees and another 37K with 75-99 employees. Over 100K business in the sweet spot. And that is not mid-market. That is the top of the heap of small business pyramid. Not many CLECs or ITSPs have more than 40K customers. There is room there.

When businesses talk about going up-market, I wonder if they realize that the competition in the Enterprise market is blood red - to chase firms who are risk adverse in procurement. By that I mean that they will only purchase from brand names because no one is going to risk it by buying from an unknown brand. No one gets fired buying from IBM, Dell, AT&T.